Bawan to implement variety of supply contracts in H2 2022, expects demand to improve: CEO

Mohammed Al Balawi, CEO, Bawan Co.

Bawan Co. has a mix of supply contracts for its various segments, which will be implemented during the second half of 2022, CEO Mohammed Al Balawi told Argaam via a phone call.

He added that the company works permanently to enter into new projects and supply contracts to secure a suitable market share for the size of its business, capacity and future expansion aspirations in the various regions.

The global tensions that arose after the onset of the Russia-Ukraine war and high fluctuations in raw material prices, directly affected the construction market. However, this slightly impacted the Saudi market and resulted in a moderate slowdown in the construction sector.

The CEO stressed the group's efficient and effective management of operations in light of the existing political and economic conditions, as it managed to reduce the negative effects of fluctuations in raw material prices and sharp rises in financing costs.

"We are optimistic about the improvement in demand, after the decline in most raw material prices,” Al Balawi said, expecting this decline to continue in the coming period and reflect on the sector and the company during the second half of the year.

Al-Balawi also said that despite a significant rise of 125 basis points, or 125% in the repo rate during H1 2022, the financing costs for Bawan increased by 23% year-on-year (YoY) in the six-month period.

The company has a clear plan for the repayment of debts, which decreased by 5% YoY in H1 2022, the CEO said.

Meanwhile, he affirmed that the company’s management seeks to improve financial solvency and maintain suitable leverage ratios, to help the company pursue expansions, if any, going forward.

Bawan’s net profit rose to SAR 94.9 million in H1 2022, from SAR 84.8 million a year earlier, Argaam reported.